Be careful investing in the TSX (or Canada in general) as long as China-loving Carney is in power. Politics remains Canada's biggest threat, not the poor economy.  The latter is a result of the first.  Our economy is dependent on the U.S. and now that Carney has a majority government, he can continue to ignore this fact. One day he will learn that due to geography, no other group of countries will ever replace U.S. demand for our goods. Until voters wake up to the fact that Carney’s "New World Order" will result in economic suicide, Canadians will continue to experience a decline in their standard of living. 

Job losses are increasing. The Elbows-up crowd boasts how Carney is creating employment after March saw an increase of 14,100 jobs.  The increase was driven by a rise in part-time work, which offset a decline in full-time positions.   Of course, it is the trend that matters, and these added jobs have done nothing to make up for the 109,000 losses during January and March.

Mortgages are resetting at higher rates. After renewing my mortgage last month, the interest cost increased by $3900 per year.  This is the minimum the average mortgage payment will increase across Canada over the next two years. The amount is equivalent to half a years worth of lease payments for the over-leveraged wannabe rich folk, more than half of a years TFSA contribution, daycare and sports for the kids, or the average family's entertainment budget. My wife and I have great credit and zero debt, so I can only imagine what most homeowners are facing upon renewal in Ontario and B.C. where the average mortgage is over $450k. Clearly, the economy is going to take a hit.

While Canadian banks have amongst the highest capital ratios in the world,  this sector of the TSX is not immune to a correction. Home prices are dropping and will continue to until investment properties can generate a positive cash flow that is competitive with dividend yields.  Unless one has put down 50% or purchased years ago, investing in real estate today will require you to cover costs out-of-pocket. It is reasonable to expect prices to fall another 30% from today’s levels. I would take some gains in Canadian bank stocks if you want to swing trade or will need the money over then next two years. I recently sold 75% of my holdings in Bank of Nova Scotia and will repurchase the shares when I recommend to in the “Portfolio” section.

Another threat to the TSX is a correction in the metals and oil market. Oil and many metals are trading at or near historical highs.  This results in abnormal high profits and climbing share prices.  Like the banks, these shares will be cheaper in the future. 

Even if the economy was the strongest in history, the stock markets are in expensive territory. The average price-earnings ratio(P/E) on the TSX continues to move higher and is trading at over 22 times earnings versus the norm of round 15 since 1954.  This means investors expect corporate profits will double in 3.2 years.  There is not a chance this will happen.  Where are consumers going to get the money when most are debt rich and savings poor? 

The U.S. markets are even more expensive.  Based on the Case-Shiller P/E which uses a ten-year average, the S&P 500 is trading at the second highest level in history.  Similarly, the Buffett Indicator, also known as the Market Capitalization-to-GDP ratio, measures the value of all stocks in a country compared to its GDP. This index is trading at 213% which is alarming when you consider 150% has proven over valuation since sell offs usually followed after this level was hit. It is not surprising that Berkshire Hathaway is sitting on the most cash in the company’s history.   

By the end of this year governments and consumers will be battling each other trying to borrow money to keep afloat. We expect interest rates to be cut next month, then begin a period of multiple increases over a few years due to demand. Rising interest rates always force down stock markets until dividend yields become competitive with bonds.

Continue to buy one-year insured GICs. If you wish to lock in capital gains, doing it now will prove to be a smart decision two years out. Carney is doing everything in his power to destroy Canada. He only cares about Brookfield and looks down at the average citizen.  He has 3% of his wealth invested in Canada, has not lived in the country for nearly twenty years, and will leave as soon as he is ousted as PM. And upon his departure, he will look around at the many pieces he broke the country into and think to himself “who cares”.

Canada has the best prospects in the world.  No other country can match what we have. We are rich in mining, energy, farmland, forests, have an above average educational system, and lots of fresh water, the most critical compound on the planet.  Let us hope Carney voters wake up and learn that we have to take advantage of our potential. Hold off on entering the stock market until valuations return to normal.

Champagne meets with top Chinese officials:  

"Prime Minister Mark Carney’s finance minister Francois-Philippe Champagne is in China to ratify a trade deal and is joined by several Canadian business interest groups, including Brookfield...According to a Globe and Mail article published Wednesday, Champagne is joined by Insurance company CEOs for Manulife, Sun Life and BMO wealth, along with “local executives” from Power Corp, and Brookfield Asset Management."

Why did Brookfield Asset Management join the delegation? Ever since Mark Carney voted to move the headquarters to New York, it is no longer a Canadian company. Carney should not be favoring a company from the very country he is refusing to negotiate trade with. So much for the Liberal's Canada First platform. The Elbows-up crowd must have severe neck pains from looking the other way so often.  

https://www.junonews.com/p/champagne-accompanied-by-brookfield

Elbows-Up Economics

It should be noted that Carney  was Trudeau's main Economic Advisor since 2020.  

"From 2014 to 2024, Canada’s real GDP per capita adjusted for purchasing power parity grew by just 3.2 percent in total, an anemic 0.4 percent per year on average, and the third lowest among 38 advanced nations. Over the same period, the United States posted 20.2 percent total growth (1.9 percent annually), and the OECD average reached 15.3 percent (1.4 percent annually). The measurement shortcomings cannot explain five-to six-fold differences in growth rates."

Why Canada’s GDP per capita crisis is real: DeepDive - The Hub

Roughly around the same time that Carney announced non-binding MOU’s with India and Japan that of course will benefit Brookfield and himself,  he called for a  renewal of the EV subsidy, he avoided commenting on the Musqueam Indian band’s claim to all of Vancouver, he also announced an additional $2b to Ukraine while our own social fabric deteriorates.  A new Canadian first occurred under his watch as well; a LNG tanker arrived in New Brunswick from Australia.  That’s right folks!  We imported natural gas from the other side of the planet even though we have our own. This is certainly not carbon friendly and proves Canadians require an east-to-west pipeline.

Ottawa had better wake up to the real world.  Thanks to the recent discoveries of natural gas in many parts of Africa, the world is closing in around 300 years’ worth of proven reserves and an additional century, at least, of unproven ones. Much of this is in our high Arctic and the Indian Ocean.  The plus for us consumers is we can expect a price between $2 and $4 and means natural gas will be the cheapest energy source for the rest of this century. The responsible governments are adopting this cheap and clean natural energy whereas it is only the left leaning governments that are bent on destroying their economies with expensive renewables. Britains power costs four-times higher than Canada’s only because they fell for the renewable trap. 

Oil is a depleting resource.  It is estimated that the world has between 80 to 100 years’ worth of reserves.  Canada is lucky because our oil reserves are close to 80 years’ worth.  But Carney feels it should be left in the ground. If Canadian provinces were viewed as a family parented by the Liberals, Carney would ultimately be viewed as abusive for purposely limiting the success of his children.  It is disturbing that the Elbows Up crowd does not see this. 

The war in the Middle East shows how important our energy sources are for Canada and others. The Liberals have been successful in blocking new pipelines that would generate wealth for Canadians and the government. The demand is there for Canada to lock-in longterm contracts with nations to sell our oil and gas. Yet, our only roadblock remains the Liberal's Climate Change agenda.   

The Climate Scam is slowly destroying Canada. It is the Brookfields of the world who are the only ones profiting from it via government handouts and naïve investors willing to lose their capital.  The citizen however is becoming poor because of it.  In fact, the Liberals are becoming very successful at pushing Canada into Third-world status.    If we could develop our resources, we could easily become one of the most prosperous countries in the world. But since we are ruled by abusive parents, Canada will  never live up to its potential. As time goes on there becomes more reasons for the kids to either run away from home and seek independence or become adopted by our neighbors. 

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If buying stocks today the dividend yield must be between 3.5% to 6%.  However, it is still better to wait for the market to come to you.   We expect interest rates to fall in June which should support the stock market.  But by year end they will begin a multi year increase because government and consumer debts are getting out-of-control and lenders will demand a higher rate of return.  The chart below highlights the relationship between equity markets and interest rates. Specifically, markets do nothing at best when interest rates increase.  This is the reason to be patient and let the market come to you. 

Warning: When looking to buy a GIC, make sure it is insured.  At the end of 2025, three small American banks went broke.  They sold uninsured GIC's and it is estimated that holders of them will get nothing back.  Today, in Canada, small lending firms are facing large amounts of withdrawals as people are becoming scared of the mess in the Middle East and the Carney government.  To date no Canadian firm has gone under.  But the withdrawals are so high it is possible some of these firms could.  We stress if there is no insurance, do not buy.

Chart Source: www.tradingeconomics.com

Worthwhile Site - Carney Watch

Elbows up!  Welcome to Carney's "New...World...Order" where politicians do the opposite of what they ran their election on. 

www.carneywatch.ca